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Nationalism at Work: Introducing the “Nationality-Based Organizational Climate Inventory” and Assessing its Impact on the Turnover Intention of Foreign Employees Thomas Köllen Department of Organization and Human Resource Management (IOP) University of Bern, Bern, Switzerland Andri Koch Department of Organization and Human Resource Management (IOP) University of Bern, Bern, Switzerland Andreas Hack Department of Organization and Human Resource Management (IOP) University of Bern, Bern, Switzerland

Abstract

Within Europe, and, indeed, globally, it would seem that for many people a renewed significance now attaches to their national identities. Although ongoing tendencies of re-nationalization and national protectionism are observable in many countries worldwide, management research and organization studies have largely overlooked this phenomenon until now. While previous research on origin-based exclusion in the workplace has primarily focused on “culture” and “race”, this article for the first time, centers on the political concept of “nationality”. Broadening the unidimensional understanding of diversity climates, we derive and validate a two-dimensional nationality-based organizational climate inventory (NOCI), consisting of the distinct dimensions “social exclusion” and “job- and career-related exclusion”. While “social exclusion” has a direct positive impact on the foreign employees’ intention to leave, the positive impact of “job confinement” is mediated by the affected individual’s decline in “organizational commitment”.

Keywords

Nationality-based organizational climate inventory (NOCI); Diversity climate; Turnover intention

Citation:

Köllen, T., Koch, A., & Hack, A. (2020). Nationalism at Work: Introducing the “Nationality-Based Organizational Climate Inventory” and Assessing its Impact on the Turnover Intention of Foreign Employees. Management International Review, https://doi.org/10.1007/s11575-019-00408-4

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1. Introduction Globally, the workforce in many regions is becoming increasingly diverse, in terms of employee origin (eurostat 2017; MPI 2017)1. Even countries that traditionally have a low percentage of immigrants, such as South Korea and Japan, have started to liberalize their immigration policies, especially for skilled immigration (Kwon 2019; Lian 2019). In many countries, however, the ongoing influx of migrants, and the increase in the share of foreign workers, has begun to face more and more headwind. In recent years, anti-migratory and nationalist voices have become louder, and increasingly socially acceptable, all over Europe (Brubaker 2017; Gattinara 2016; e.g. Mann and Fenton 2017; Polyakova and Fligstein 2016), in the Middle East (Jureidini 2005), in the US, and in other parts of the world (Vickers 2017; Wodak and Krzyżanowski 2017; Yu 2014). In the UK, for example, the promise to introduce more restrictive immigration policies for EU citizens united many people in supporting the country’s potential withdrawal from the European Union. During this Brexit debate it was not uncommon for immigrants from the EU to be framed as ‘exploiters’ or ‘invaders’ (Morrison 2019). Today, their foreign workforce is a key success factor for many organizations (Buche et al. 2013; Ozgen et al. 2017), and even economies (Hatton and Williamson 2005; Valverde and Latorre 2019). Highly-skilled foreign employees (or expatriates) especially, no matter whether they are self-initiated expatriates or not2, have become crucial for maintaining the competitiveness of many economies, and organizations within globalized economies (Aobdia et al. 2018; Nathan 2014; Tung 2008). In order to avoid the costs that accompany employee turnover (Tziner and Birati 1996), which are especially high for highly-skilled, managerial employees (Hancock et al. 2013), it is very much in the interests of these organizations to retain these employees. However, the workplace is not immune to infiltration by the aforementioned emergent anti-migratory political climates. For the sake of building an inclusive workplace, it is, therefore, crucial to gain a deeper understanding of the interrelation between nationally exclusive (or nationalist) working climates, and the intention of foreign employees to leave their employer.

1 While from 1990 to 2015 the total number of civilian employed workers in the US rose by 30.4 percent, the share of foreign-born employed workers in the US workforce nearly doubled, from 9.2% in 1990, to 17.1% in 2015 (MPI 2017). Almost half of them were naturalized citizens in 2015 (MPI, 2017). However, naturalization does not perforce change an individual’s national identity, nor the way in which an individual is perceived, and treated, in national terms (Momen 2018). Within Europe, the European Union and its common labour market mean that naturalizations are no longer necessary for intra-European mobility, at least for most European countries. This is one reason for the ongoing process of the European workforce becoming increasingly nationally diverse. In 2017, throughout the whole of the EU (EU 28), 7.9% of the workforce had a citizenship different from that of the country they were working in. For the ‘older’ Western EU member states (EU 15) the share was 9.7%. The countries with the highest share of foreigners amongst their workforce were Luxembourg (54.1%), Cyprus (20.8%), Ireland (16.4%), Austria (15.45%), Estonia (13.7%), the UK (11.5%), Germany (11.2%), and Spain (11.05%). However, all EU countries have registered an increase in the share of foreign workers in the last decade (eurostat 2017).

2 It should be noted that the situation for foreign employees who were sent abroad by an international organization or company to a foreign subsidiary or headquarters might be somewhat different from the situations self-initiated expatriates find themselves in (Froese & Peltokorpi, 2013; Peiperl et al, 2014). However, for the purposes of this paper, this distinction is not necessary, and the terms ‘foreign employee’, ‘migrant’ or ‘expatriate’ are used interchangeably. The crucial characteristic that all of them share is that of being foreign employees (Andresen, et al., 2014; Berry & Bell, 2012), no matter if their original plan was to live abroad on an indefinite basis (Cerdin, Diné & Brewster, 2014), or to repatriate within a certain period (Cerdin & Selmer, 2014). In any case, very often, these plans are subject to change (Naumann, 1992).

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However, research that tries to understand the mechanisms of hierarchization and marginalization that non-domestic employees have to face in the workplace predominantly focuses on cultural aspects and differences (e.g. Cox 1994; Ely and Thomas 2001), or it applies the concept of racism, a concept that usually needs visible markers that indicate an employee’s ‘race’ (Salin 2003). This research ignores the national element within these processes. In Europe particularly, but also globally, a significant share of migratory movements take place between geographically, culturally, and linguistically proximate nations (Délano 2013; Verwiebe et al. 2014). Cultural and racial aspects, thus, cannot be considered to be the primary reason or ‘rationale’ behind the processes of exclusion that may potentially occur in these cases. The diversity dimension in question here is, rather, the nationality of employees, which might trigger emotional distance, and related exclusive behavior. To the best of our knowledge, however, no research on origin-based exclusion in the workplace, and the consequences thereof, has yet applied a national focus. This is even more astonishing since, in Europe, as well as globally, national identities continue “to shape the predominant ways in which people make sense of themselves and others” (Antonsich 2009, p. 281). Empirically based on two samples of German employees working in Switzerland and Austria, this article addresses this research gap by developing the Nationality-based Organizational Climate Inventory (NOCI), and analyzing its interrelation with employees’ intention to leave the employer. The phenomenon of nationalist exclusion is, of course, not confined to Switzerland and Austria, but these countries are representative of nations that depend significantly on migrant workers (Aeppli 2010; Krzyzanowski 2008; Stalder 2008). Furthermore, the national composition of incoming migrants from primarily neighboring countries make Switzerland and Austria good cases for separating the national (and nationalist) element of working conditions for expatriates and migrant employees from cultural or racial elements, in order to analyze its impact on (in this case) the willingness of German employees to remain. Against this background, it is safe to assume that the perceived origin-based exclusion or inclusion on the part of German employees in these countries is primarily due to their nationality. The contribution of this article is fivefold. Firstly, we are introducing the concept of nationality-based exclusion in the workplace. In doing so, we are adding a new perspective to understanding origin-based exclusion, a phenomenon that has hitherto predominantly referred to the concept of racism. Secondly, we are developing and testing a scale which will measure the degree of perceived nationality-based exclusion. Thirdly, we are broadening the discourse on organizational diversity climates: we do this, on the one hand, by focusing on nationalist climate perceptions to add a new dimension of workforce diversity to this discourse; on the other hand, by analyzing two distinct facets of nationalist diversity climates with distinct impacts, we are going beyond the hitherto predominant approach of viewing diversity climates as one single, coherent parameter. This might pave the way for re-evaluating other dimension-specific diversity sub-climates. Fourthly, we are contributing to the field of (expatriate) adjustment by operationalizing a crucial environmental facet of the person-environment relationship. Fifthly, we are adding new insights to the discourse on employee-retention. In the context of Europe, especially, with ‘freedom of labour’ within the European Union, but also globally, the topic of national inclusion in the workplace for maintaining or attracting a national diverse workforce is a highly relevant issue. This article is structured as follows. In the first place, we connect the discourses on diversity climates and expatriate adjustment, and theoretically derive the two-dimensional concept of a ‘nationality-based organizational climate’. Drawing theoretically on career capital, job embeddedness, and social identity theory, we then develop hypotheses about the impact of each sub-climate on the intention of employees to leave the job. In the subsequent section, we explain the method; we briefly outline the peculiarity and suitability of our chosen sample, and present the

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data. In the next section, we then describe the results, and discuss them in the concluding section. The study ends with some limitations, as well as suggestions for future research.

2. Theoretical Background 2.1. Organizational Climates. Adjustment and Diversity

The conceptualization of a nationality-based organizational climate benefits from its close proximity and its links to two different streams of management and organizational research. The first stream of research is the one on organizational climates. Within this discourse, the nationality-based organizational climate represents one specific facet of an organization’s diversity climate, namely the degree and shape of inclusiveness that foreign members of an organization perceive in terms of their nationality. The second stream of research is the one on expatriate adjustment. Within this discourse, the nationality-based organizational climate can be framed as one workplace-related facet of the environment that an employee encounters in another country, and to which he or she might adjust to in different ways or to different degrees. Although there is no shared consensus about the concept of ‘adjustment’ and its adequate operationalization (e.g. Lazarova and Thomas 2012; Searle and Ward 1990), adjustment is something that happens within a specific person-environment relationship. Referring to the psychological background of this concept, Hippler et al (2014) describe an expatriate’s adjustment as his or her striving for “harmony, satisfaction, or comfort that will manifest as an individual’s ability to function socially, his or her feelings of happiness and subjective well-being, and his or her somatic and psychological health” (Hippler et al. 2014, p. 12) within a new environment. Besides factors that are immanent to the specific individual expatriate (Mahajan and Toh 2014), this ‘comfort’ or ‘harmony’, therefore, has an interrelation with organizational and workplace-related attributes. From a diversity perspective, the most inclusive nationality-based organizational climate – no matter whether this is utopian or not (Georgiadou et al. 2019) – would be a climate where the origin and nationality of an employee would not make any difference, in terms of how he or she is appreciated, accepted, and integrated in the workplace (Köllen et al. 2018). From this perspective, a foreigner’s need for adjustment would characterize the workplace as not being fully inclusive, at least on the climate level. While the concept of adjustment suggests both the person and the environment to be equally responsible for a foreigner’s ‘successful’ inclusion, the concept of diversity and inclusion puts an emphasis on an appropriate human resource management (Shen et al. 2009), or organizational design (Richard and Miller 2013), in order to include foreign employees. It is, therefore, more up to the organization or employer to create the most inclusive organizational diversity climate for its employees, ideally for all dimensions of workforce diversity. However, the research field of expatriate adjustment is much more developed than the field of nationality-based organizational climates, and therefore it can provide theoretical and conceptual findings to advance the latter. For research on expatriate adjustment, on the other hand, our specific diversity-focus could contribute to overcoming the “lack of empirical attention given to identifying the content domain of the environmental facets in the expatriate adjustment literature” (Hippler et al. 2014, p. 16). As the focus of this article is on exactly those climate aspects that employees face and perceive because of (or in terms of) their nationality and their national origin, it can be assumed that these nationality-related aspects are relevant for all foreign employees, albeit perhaps to different degrees. It is, therefore, not important whether the foreign employee is an assigned or self-initiated expatriate (for the debate on the differences between both concepts see e.g. Andresen et al. 2014;

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Biemann and Andresen 2010). For our research focus we can, therefore, consider the terms ‘foreign employee’, ‘migrant employee’ and ‘expatriate’ synonymous. Within management research and organizational studies, the discourse on international migration and expatriation seems to take place more or less outside the discourse on workforce diversity and its adequate (diversity) management. This is frankly astonishing, since employees’ origins, often condensed in their nationalities, are an important dimension of workforce diversity; as important as, for example, their gender, age, or sexual orientation (Bunderson and van der Vegt 2018; Roberson et al. 2017). Employee origin can, therefore, be just as responsible for structuring processes of hierarchization, marginalization, and prioritization within organizations. Against this background, Al Ariss and Crowly-Henry (2013) identify a lack of diversity-informed research on the expatriation process. However, before applying, for example, intersectional diversity perspectives to this process, it is important to link both discourses together. This can be done by referring to the concept of organizational climates for foreign employees, conceptualized as one kind of diversity climate.

2.2. The Two Dimensions of a Nationality-based Organizational Climate There is considerable variation in the way diversity climate is defined (Dwertmann et al. 2016), and no “consensus on its definition, boundaries and dimensions” (Cachat-Rosset et al. in press, p. 8). Based on Cachat Rosset et al.’s (in press, p. 12) definition of diversity climate, and taking into account that climate measures should “tap subjective interpretations and not request factual reporting of the existence of certain practices or diversity”, we define the nationality-based organizational diversity climate which is analyzed in this article as the employees’ perception of attitudes and behaviors in favour of foreign nationals in the organization’s social context. Although most scholars agree that diversity climate is a multidimensional and complex construct (Herdman and McMillan-Capehart 2010), in research it “is typically treated as unidimensional” (Dwertmann et al. 2016, p. 1136). In terms of the multidimensionality of a nationality-based organizational climate, this issue can be addressed by drawing on Hippler et al.’s (2014) critique of the oft-utilized approach from Black and colleagues (Black and Stephens 1989), whereby adjustment is conceptualized as having a work, a non-work, and an interactional domain. Hippler et al. decisively question this conceptualization by pointing out that these factors, or dimensions, are not discrete, as the non-work and work domain already contain the interactional element, and are therefore not separable from an interactional domain (Hippler et al. 2014, p. 15). They, therefore, argue the case for a two-factor conceptualization. Subsequent research, it should be noted, has shown that these two factors, (i.e. work-related and non-work-related), can then have sub-domains (Haslberger et al. 2013). From a general organizational climate perspective this estimation is plausible, as climate as such is often conceptualized as being produced interactionally, since it “arises from the intersubjectivity of members as they interact within a context” (Moran and Volkwein 1992, p. 19). For the psychological climate, as which the organizational climate is perceived by the members of the organization (James et al. 1978), this makes the third, interactional, dimension redundant, since, in any case, organizational climates are produced and performed interactionally. However, in terms of a possible two-factor model of a NOCI, consisting of a work and a non-work domain, these domains have to be adapted to the organizational focus of this specific organizational climate. The work-domain can then be narrowed down to those aspects within inner-organizational interaction that are directly related to an individual’s job performance and, related to this, his or her career development opportunities (Armstrong‐Stassen and Schlosser 2008; Hicks‐Clarke and Iles 2000). However, there are also interactional aspects within organizational workplace settings, that can be connected to non-work related issues and therefore, in a narrower sense, to a non-work

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domain, albeit one occurring in the workplace. Such aspects or facets of nationality-related interactions in the workplace, which are not perforce directly linked to one’s job performance or career development, can be found in the way in which an employee is socially accepted by, or ostracised from, his or her colleagues (Harvey et al. 2018; O’Reilly and Banki 2016; Pearce and Randel 2004). We therefore call the first dimension of NOCI ‘job- and career-related exclusion’ and the second one, ‘social exclusion’. Theoretically, ‘social exclusion’ can be derived from social identity theory. According to this theory, individuals perceive a specific need to maintain a positive social identity, by demarcating from each other, and by attaching a higher value to the ingroup than to the outgroup (Tajfel 1982). Therefore, in terms of everyday climate perceptions, one can expect different degrees of some form of socially exclusive behavior towards foreign employees, drawing a demarcating line between host-country nationals, and foreigners within the workforce (Hogg and Terry 2000). As such self-confirming behavior on the part of the local employees excludes the foreign employees from their host-nationality ingroup, the designation of this climate-facet as ‘social exclusion’ seems appropriate. This exclusion can occur on the mere symbolic and linguistic level. However, according to realistic group conflict theory (Tajfel and Turner 2001), this exclusion or polarization can leave the level of identity-confirming actions of ‘othering’, manifesting itself in an exclusive behavior, in terms of specific job-related resources that are perceived to be scarce in the workplace (Ashforth and Mael 1989; Esses et al. 1998). On the part of host-country nationals, this might lead to activities that reflect their reserve, in terms of allowing the foreign nationals access to these resources, or this might lead to actions that impede this access (Miscenko and Day 2016; van Knippenberg 2003). Theoretically, this explains the second facet of the nationality-based climate inventory and supports the terminology ‘job- and career related exclusion’. This facet covers all diversity-climate related aspects that have a direct impact on an employee’s career capital, and their professional development potential. Referring to different streams of adjustment-research and diversity climate research, we will show in the following, how these climate facets are related to an employee’s turnover intention.

2.3. The Nationality-Based Organizational Climate and Foreign Employees’ Turnover Intention

‘Adjustment’ is a key construct in management literature on foreign employees’ intentions to stay in, or to leave, the job (Hellman 1997; Mitchell, Holtom, and Lee 2001; Zhu et al. 2016). Given that adjustment takes place within a person-environment relationship, and that it is motivated by an individual’s striving for comfort and harmony in this relationship (Hippler et al. 2014), the attributes and characteristics of this environment play a crucial role in this striving. We propose one of these attributes to be the degree and shape of nationality-based resentments or appreciation held by an individual’s colleagues, condensed in a nationality-based organizational climate. For example, Bader (2017) shows that in the work domain, interaction with colleagues, especially host-country nationals, has the highest impact on an expatriate’s adjustment. This interaction in the workplace, however, can be negatively influenced, shaped by negative attitudes toward certain nationalities and nationals held by colleagues (Peltokorpi and Froese 2009). These attitudes are often built on stable nationality-related stereotypes (Eagly and Kite 1987). In order to distinguish national stereotypes from statistical generalizations, Bonache (2016) et al. “define national stereotypes as evaluative over-generalizations about the more-or-less explicit traits of individuals from a particular country” (p. 3). In contrast to statistical generalizations about the relative prevalence of certain traits amongst certain national groups (e.g. Hofstede and McCrae 2004; Inglehart et al. 1998), “stereotypes are intrinsically deceptive and […] have much more pernicious

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effects” (Bonache et al. 2016, p. 3). One of these pernicious effects is that, for some individuals who believe in and promulgate these stereotypes, they might be utilized as a legitimating basis for derogatory and ostracizing behavior toward certain foreign nationals. In the workplace, as well as in the private sphere, such behaviour can have a strong negative impact on a migrant’s adjustment. Referring to this phenomenon as the “skill paradox”, Dietz et al. (2015) show that exclusive behavior from host-country nationals towards migrants can be even stronger, where migrants have a higher skill-level. Negative attitudes, and related exclusive behavior toward foreigners, therefore, can have a strong negative impact on their cross-national adjustment. Bader (2017) shows that colleagues in the work domain and friends in the non-work domain have the highest influence on all types of adjustments, and with it also on their turnover intention. The degree of behavior-related atmospheric inclusiveness or exclusiveness in the workplace in terms of employees’ demographics can be conceptually framed through the concept of ‘diversity climates’, as already outlined above. Several studies show that a positive diversity climate – especially when associated with facet-specific fair and non-discriminatory behavior and workplace conditions (Dwertmann et al. 2016) – has a positive impact on employees’ intentions to stay with their employer (Buttner et al. 2012; Gonzalez and DeNisi 2009; Kaplan et al. 2011; McKay et al. 2007; Singh and Selvarajan 2013; Stewart et al. 2011). Boehm et al. (2014) show that a positive diversity climate lowers the individual’s turnover intention, mediated through collective perceptions of ameliorated social exchange. In the context of expatriation, McNulty (2013) has introduced the concept of “individual return on investment (ROI)” as “the perceived benefits that accrue to expatriates, arising from international assignment experience in relation to personal and professional gains” (p. 30). Organizational expatriates and self-initiated expatriates alike have decided to leave their former surroundings, to which they might have considerable emotional and personal ties, in order to work in a new country. Thus, although this might differ in some degree between assigned and self-initiated expatriates (Froese and Peltokorpi 2013; Meuer et al. 2019), they have made some effort, and have ‘invested’ something, and will therefore likely anticipate some benefit in return for this effort and investment. However, it is not only the enhancement of ‘career capital’ for these expatriates (Cao et al. 2012) that counts as beneficial; there are also potentially beneficial ‘returns’ outside the work domain, in the personal sphere. This is the basis on which the two different layers or facets of a nationality-based (or nationalist) organizational diversity climate, are interrelated with employees’ turnover intention in different ways.

2.3.1. Nationality-based ‘Social Exclusion’ McNulty’s definition above of ‘individual ROI’ that migrants and expatriates might expect to receive from their ‘investment’ in a personal relocation includes personal, intrinsic desires that, as relational factors, may be even more crucially important to individuals than financial remuneration (McNulty et al. 2013). McNulty et al. theoretically underpin their claim through the construct of ‘job embeddedness’ as ‘‘the totality of forces that keep people in their current employment situations’’ (Feldman and Ng 2007, p. 352). The concept of job embeddedness comprises three elements of the organization for which the employees work (on-the-job), and the wider community of which they are a part, respectively (off-the-job). However, for the purpose of our study only the organizational context matters. The three elements of job-embeddedness are ‘fit’, ‘links’ and ‘sacrifice’. ‘Fit’ covers employees’ comfort and compatibility with the organization as such. ‘Links’ includes the quantity of any connections to persons in the organizational context, no matter whether formal or informal ones. ‘Sacrifice’ stands for the entirety of psychological and material benefits that one would leave behind, in the case where one were to leave the job (Mitchell, Holtom, and Lee 2001; Mitchell, Holtom, Lee, et al. 2001). Numerous studies show that a low

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level of job embeddedness is positively interrelated with the intention of employees to leave the job (Halbesleben and Wheeler 2008; Mitchell, Holtom, Lee, et al. 2001; Tett and Meyer 1993). We conclude, therefore, that when employees are exposed to a working climate of permanent othering, which reduces them to their nationality, this will reduce the ‘fit’ they feel to this organizational environment. Furthermore, such a climate will probably not be fruitful for establishing many stable ‘links’ to colleagues, and the ‘sacrifice’, involved in leaving such an excluding climate, would not be very high. Therefore, it can be assumed that one’s ‘job embeddedness’ is low under such conditions.” Thus, we state: H1: The worse expatriates perceive the climate to be, in terms of social exclusion because of their nationality, the higher their intention to leave the job.

2.3.2. Nationality-based ‘Job- and Career-Related Exclusion’ Besides personal and intrinsic desires, McNulty’s (2013) concept of ‘individual ROI’ covers the desire of foreign migrants to broaden their ‘career capital’. ‘Career capital’ is mostly conceptualized as comprising three distinct dimensions of ‘knowing’. The first dimension includes responses to issues of attaching meaning to one’s career aspirations and career path. Therefore, it is related to processes of sense-making and identification of, and with, career goals and paths. It provides the individual with energy and motivation for climbing the career ladder (‘knowing why’). The second dimension of career capital refers to the extension of work-related knowledge and skills needed for a ‘successful’ career and work performance (‘knowing how’). The third one refers to the amount and quality of career-relevant contacts and networks (‘knowing whom’)3 (e.g. Arthur 2014; Suutari and Mäkelä 2007). Accumulating “career capital”, is therefore often seen as being worth striving for, since it promotes an expatriate’s “ability to increase external marketability [which, in turn,] appears to be a safety net that is used to ensure ‘lifetime employability’” (McNulty 2013, p. 41). Several studies show that expatriates’ perception of being inhibited in accumulating career capital, or even losing some of this capital, is negatively related to their organizational commitment (Cao et al. 2014; e.g. Judy and Greg 2011; Kim et al. 2018). This corresponds to the finding that organizational “commitment depends in part on perceptions of inducements-contributions balances or, similarly, the ratio of rewards received from the organization in relation to the costs incurred to receive those rewards” (Hrebiniak and Alutto 1972, pp. 569-570). Furthermore, several studies indicate that a low level of organizational commitment is positively interrelated with the intention of employees to leave their jobs (e.g. Cole and Bruch 2006; Powell and Meyer 2004).

3 ‘Knowing whom’ differs from the element ‘links’ of the concept ‘embeddedness’. “Embeddedness addresses the number of links individuals have” (Feldman and Ng 2007, p. 338) and this “number of strands connects an employee […] in a social, psychological, and financial web” (Mallol et al. 2007, p. 36). Thus, a higher number of links means a closer bond to the organization. In contrast, ‘knowing whom’ is less quantitative, and has a stronger qualitative focus, as it is more about meeting the ‘right’ people, and “getting to know people who may be helpful to their own career development” (Jokinen et al. 2008, p. 981). People that strengthen one’s career capital also constitute links in one’s ‘webs’, but, conversely, one’s links do not perforce enhance career capital. Thus, although the constructs ‘knowing whom’ and ‘links’ have a certain overlap, they have different directions of impact, reflected through the different concepts to which they belong.

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Thus, we assume also that the perception of being less supported, or even impeded, in accumulating career capital because of one’s nationality is positively related to an individual’s intention to leave the job. Therefore, we state: H2: The worse expatriates perceive the climate to be, in terms of job- and career-related exclusion, because of their nationality, the higher their intention to leave the job. This effect is fully mediated by organizational commitment. Figure 1 illustrates our hypothesized model; in the following pages, we will outline how these hypotheses have been tested.

Figure 1 Hypothesized model

Note. Black arrows denote direct paths; black dashed arrows denote indirect influences; oval fields represent latent

variables.

3. Methodology We designed and conducted two studies to test our theoretical model and hypotheses. In Study 1, we developed a nationality-based organizational climate scale. We then conducted a second study to test the function of the new scale and to analyze its nomological network.

3.1. Study 1: Scale Development

We followed Hinkin (1998) and DeVellis (2016) in using a deductive approach to generate potential scale items. Starting from Liddle et al.’s (2004) LGBTCI, a climate inventory for lesbian, gay, bisexual, and transgender employees, we reviewed numerous item catalogues from other facet-specific diversity climates (see Cachat-Rosset et al. in press for a literature overview ), which could easily be adopted for a nationality-related organizational diversity context. We identified 33

Job- and Career-related Exclusion

Social Exclusion

Intention to Leave

H2 (+)

H1 (+)

Organizational Commitment

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statements that are consistent with our two climate dimensions4. Each statement was discussed in a group with three researchers, to confirm its suitability in representing one dimension of the nationality-based diversity climate. We dropped seven items, either because they were not sufficiently distinctive (e.g. double-barreled) or they were redundant. This procedure resulted in 26 statements. The factor structure and the quality of this structure was examined by surveying German employees working in Switzerland. The data was collected by mid-year 2014 via an online questionnaire. Participants were invited by email, through a number of German networks (such as the group ‘Germans in Zürich’, from the social networking site Xing), and through the leading German daily business newspaper Handelsblatt, which provided a link for assessing the online questionnaire on their homepage. From those who followed the invitation link and opened its first page, 38.5 percent finished the questionnaire. 54.5 percent of the participants were male. 3.7 percent of the respondents were younger than 25 years old; 37.7 percent were between 26 and 35 years old; 35.5 percent were between 36 and 45 years old; 20.5 percent were aged between 46 and 55 years; 2.6 percent of the participants were older than 55. The average length of time respondents had already been living in Switzerland was 8.1 years. We then randomly split the sample (N=889) in to a development group of 445 people, and a validation group of 444 participants to conduct the exploratory and confirmatory factor analysis. Participants rated each statement on a five-point Likert scale (1 = strongly disagree to 5 = strongly agree). The exploratory factor analysis revealed a clear two-factor structure, with Eigenvalues greater than 1. In addition, we ran a classical parallel analysis with a Monte Carlo extension (Dinno 2009), to confirm our conceptualized structure. The resulting factors explain 73.26% of the total variance (see Table 1). Factor 1 describes social exclusion, and consists of three items with factor loadings larger than 0.68 (α = 0.89). Factor 2, representing job- and career-related exclusion, is measured by seven items with loadings larger than 0.71 (α = 0.93). In the next step, we conducted a confirmatory factor analysis with the validation group, and found reasonable fit for our two-factor model (χ2=70.38, df = 32, CFI = 0.98, RMSEA = 0.056), all loadings were highly significant. Furthermore, the model fit for an alternative model with only one factor was worse ((χ2=308.57, df = 35, CFI = 0.89, RMSEA = 0.142). Study 1 showed the first evidence for the reliability, construct- and content validity of the nationality-based organizational climate inventory (NOCI). We therefore turned to study 2 to explore the impact of both dimensions and to provide further evidence for the nationality-based organizational climate inventory.

4 Most items are taken from scales published in English sources, and in this article, they are also quoted in English. However, as our survey was conducted in German language, we have used the translation-back-translation method (Harkness, 2003), to transfer these English items into German.

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Table 1 Exploratory factor analysis factor loadings for NOCI

Items Factor At my work place.. 1 2

1. Germans constantly have to justify and legitimize themselves for being in Switzerland. 0.68 0.20

2. I perceive the permanent polarization between everything German and Swiss as being burdensome. 0.76 0.08

3. sport events and politics are very often used to polarize the German and Switzerland. 0.83 -0.04

4. I sometimes feel that people actively try to stop me from advancing because I am German. 0.03 0.83

5. I do not get enough recognition because I am German. 0.07 0.80

6. because I am German, I get assigned jobs that no one else wants to do. 0.01 0.74

7. Germans get less scope. 0.09 0.78

8. supervisors control the output of Germans more often than the output of Swiss. 0.05 0.77

9. my colleagues withhold certain work-related information from me which they share with Swiss colleagues. 0.09 0.71

10. my work is worth less than that of my Swiss colleagues. 0.10 0.73

Note. Dominant factor loadings are presented in bold. Factor 1: Social exclusion; Factor 2: Job- and career-related exclusion.

3.2. Study 2: Field Study with Germans in Austria Sample. We collected the data for study 2 at the end of 2014 via an online questionnaire. We invited participants via email, primarily through a number of German networks (including a network of Germans in Austria on Xing), and through a press release (APA), sponsored by the City of Vienna. From those who followed the invitation link and opened its first page, 43 percent finished the questionnaire (N=631). The average length of time they had already been living in Austria is 8.02 years, 45.64 percent of the participants were male. 2.7 percent of the respondents were younger than 25 years old; 32.7 percent were between 26 and 35 years old; 36.8 percent were between 36 and 45 years old; 24.3 percent were aged between 46 and 55 years; 3.6 percent of the participants were older than 55.

3.3. Measures.

Intention to leave. A 4-item scale from Nissly et al. (2005) was used to measure the intention of individuals to leave the job. Participants rated on a 5-point Likert scale, ranging from 1= strongly disagree, to 5 = strongly agree. The items rated were statements of the kind “in the next few months, I intend to leave this organization”. The Cronbach alpha for this construct was .81, which is above the cut-off point of .7 (Nunnally and Ira 1994). Furthermore, a confirmatory factor analysis confirmed the underlying structure. All factor loadings were highly significant, and the fit statistics met the criterion (χ2=5.07, df = 2, CFI = 0.99, RMSEA = 0.059). Nationality-based organizational climate. We used the 10-item scale developed in study 1. The Cronbach alpha value for the factor “job- and career-related exclusion” was .92, and for the factor “social exclusion” it was .86, which are both above the cut-off criteria. An excellent fit was found for the two-factor model (χ2=94.45, df = 32, CFI = 0.98, RMSEA = 0.062). Additionally, the model

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fitted the data better than an alternative model with one factor (χ2=446.22, df = 35, CFI = 0.88, RMSEA = 0.151). Commitment to the organization. A 5-item scale from Tate et al. (1997) and Firth et al. (2004), measures commitment to the organization. Items (e.g. “I will work harder than I have to, in order to help my employer to be successful”) range from 1 = “strongly disagree” to 5 = “strongly agree”. Internal consistency (α=0.80) met the cut-off criteria. A confirmatory factor analysis confirmed the structure. Again, factor loadings were highly significant and the model has reasonable fit statistics (χ2=10.24, df = 4, CFI = 0.99, RMSEA = 0.059). Control variables. Our sample considers Germans in Austria, hence the intention to leave might be influenced by the Germans’ length of stay in Austria, and the perception of the NOCI dimensions could vary by the participant’s number of years in Austria. Furthermore, we controlled for age (categories from up to age 25 to above age 65) and sex, where 1 = men and 2 = women (Griffeth et al. 2000; Lok and Crawford 2004; Mathieu and Zajac 1990). Table 2 shows the summary statistics of the measured variables. Table 2 Descriptive statistics and correlations

Variable N M SD 1 2 3 4 5 6 1. Sex 631 1.46 0.50 2. Age 449 2.94 0.92 -0.23*** 3. Length of Stay 614 8.02 6.08 -0.07 0.44*** 4. Social Exclusion 512 2.94 1.30 0.06 0.01 0.05 5. Job- and Career-related Exclusion 539 1.83 0.95 0.00 0.09 -0.09* 0.64***

6. Intention to leave 454 2.86 1.15 -0.02 -0.20*** -0.15** 0.23*** 0.27*** 7. Commitment 455 3.61 0.83 -0.04 -0.09 0.00 -0.14** -0.23*** -0.46***

Note. Sex: 1 = man & 2 = woman; Age categories from 1 = up to age 25 to 6 = above age 65

4. Results 4.1. Analytical Procedure

We addressed the potential problem of common method bias associated with self-reported measures with Harman's one-factor test (Podsakoff et al. 2003). The results of a one-factor CFA with all observed variables loaded on a single latent factor indicated a poor fit with the data (χ2=902.70, df=77, RMSEA=0.158, CFI=0.707, SRMR=0.126), suggesting that common method bias is not an issue in our sample, and it does not confound the interpretation of the results. We used a two-step approach to test our structural equation model. First, we tested all latent constructs in the model; then we analyzed the structural model. For the mediation analysis, we followed the recommendation from James and Brett (1984). Thus, full mediation is tested by a goodness-of-fit measure and a significant indirect effect of the independent on the dependent variable. Missing values are treated as missing at random (MAR); therefore, we applied a full information maximum likelihood (FIML) procedure (Little and Rubin 2014). This assumption is less restrictive than missing completely at random (MCAR). MAR assumes that the missing values depend only on observed values. We conducted all analyses with Stata 15.1.

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4.2. Model Building The measurement model consists of the following four latent variables: intention to leave, commitment, social exclusion and job- and career-related exclusion. The statistics show reasonable fit (Hu and Bentler 1999) (χ2=275.40, df = 142, CFI = 0.97, RMSEA = 0.047), with highly significant loadings. In the structural model, we build hypothesized paths between latent variables, and we control for length of stay, age, and sex. The final model is shown in Table 3 and indicates adequate fit statistics (χ2=378.74, df = 198, CFI = 0.96, RMSEA = 0.047). This model explains 8.54% of the variance in commitment to the organization, and 49.85% of the variance in intention to leave. Table 3 Results of the SEM analysis of study 2

Commitment Intention to leave

Estimate SE Estimate SE

Sex -0.13** 0.04

Age -0.29*** 0.05

Length of Stay -0.08 0.05

Social Exclusion 0.20*** 0.05

Job- and Career-related Exclusion

-0.29*** 0.05

Commitment -0.55*** 0.04

Note. SE: Standard Error; Sex: 1 = man & 2 = woman; Age categories from 1 = up to age 25 to 6 = above age 65

**p<0.01

***p<0.001

4.3. Direct Influences

The direct path from social exclusion to intention to leave is strongly significant (β = 0.20, p < 0.001) which supports our hypothesis 2. Furthermore, job- and career-related exclusion directly affects commitment to the organization (β = -0.29, p < 0.001). We found a highly significant influence from commitment to the organization (β=-0.55, p < 0.001) on an individual’s intention to leave. Concerning control variables, gender (β = -0.13, p < 0.01) influences intention to leave, in the sense that women would seem to have less intention to leave their organization. Additionally, age negatively influences the intention to leave (β = -0.29, p < 0.01), with younger individuals showing a higher intention of leaving than older ones. Other controlled effects are not significant.

4.4. Indirect Influence

To test hypothesis 2, the indirect effect from job- and career-related exclusion through commitment to the organization to intention to leave is calculated by multiplying the coefficients of the paths. Both direct effects are strongly significant. Altogether, in support of this mediation hypothesis, we found highly significant indirect effects of job- and career-related exclusion (β = 0.16, p < 0.001, CI95 [0.09, 0.22]) on intention to leave. To further confirm the full mediation of

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H2, we tested an alternative model where we allowed an additional direct path from job- and career-related exclusion to intention to leave. Table 4 compares the indirect effects of the alternative model with the hypothesized models. Table 4 Indirect effects of job- and career-related exclusion on intention to leave

Model Direct Path a Path b Indirect effect a*b [CI 95%]

Hypothesized

Job- and career-related exclusion

-0.29*** -0.55*** 0.16*** [0.09,0.22]

Alternative 1

Job- and Career-related Exclusion

0.05 -0.29*** -0.55*** 0.15*** [0.09, 0.22]

Note. Path a refers from job- and career-related exclusion to commitment; path b refers from commitment to intention to leave; CI: Confidence Interval

***p<0.001

The alternative model shows adequate fit statistics (χ2=378.38, df = 197, CFI = 0.96, RMSEA = 0.047). The direct path from job- and career-related exclusion to intention to leave in the alternative model is not significant (β = 0.05, p > 0.05), however the indirect effect is still significant (β = 0.16, p < 0.001). Therefore, we conclude that there is full mediation of job- and career-related exclusion via commitment to intention to leave.

5. Discussion Our nationality-based organizational climate inventory, for the first time, provides a tool for management and organizational research, as well as for management practice, for assessing nationality-based mechanisms of inclusion and exclusion in the workplace. In the same way that the inventory is based on both organizational diversity climate research and research on expatriate adjustment, it also makes important contributions towards developing both research streams further. Given that adjustment research is concerned with the concept of the person-environment fit as “the goodness of fit between the characteristics of the person and the properties of the environment” (French et al. 1974, p. 316), the NOCI monitors the environmental property of inclusiveness in terms of an individual’s foreign or non-domestic nationality at the workplace. However, the decisive factor here is a specific aspect of the work environment as such, i.e. the behaviour of the persons that constitute this facet of the workplace environment, and not the way the individual responds to it. Thus, within the field of expatriate adjustment, our research makes an important contribution towards addressing the “lack of empirical attention given to identifying the content domain of the environmental facets in the expatriate adjustment literature” (Hippler et al. 2014, p. 16). The NOCI provides future expatriate adjustment research with a helpful tool to empirically investigate further the environmental facet of the nationality-based organizational climate, and its interrelation to other parameters in the adjustment process. Up until now, adjustment research has

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primarily focused on cross-cultural adjustment (e.g. Wechtler et al. 2017); our research, however, adds a national facet to this field, by focusing on a cross-national diversity-perspective. As the “socializing behaviors home country nationals may display or withhold from the expatriate will affect the adjustment of the expatriate” (Toh and DeNisi 2007, p. 281), this research has shown that this socializing behavior, condensed in the expatriate’s climate perception, also has a nationality-related facet. Our two studies show that, in terms of the nationality-based organizational diversity climate, two layers or facets of nationality-related climate perceptions can be distinguished: ‘social exclusion’, and ‘job- and career-related exclusion’. The results show that each of these nationality-related sub-climates is differently related to the intention of an employee to stay with his or her current employer. Although it is a highly relevant topic, especially in the Europe of today, the issue of negotiating national identities and related nationalist mechanisms of inclusion and exclusion within organizations has, hitherto, been more or less absent from management research and global diversity research. This might reflect a sort of American-centric bias in management studies and diversity research, as, in national terms, North America is much less diverse than Europe. Europe comprises some 50 countries, and, because of the European Union and multiple bilateral agreements, a significant portion of its workforce can freely circulate within the continent. Although tendencies of rising nationalism and related protectionism are also observable in the USA, in Europe these tendencies are growing directly from reactions to a nationally much more diverse workforce. Therefore, although the US focus on ethnicity and race-related issues in origin and heritage-related diversity research and practice is still of great importance, including in its application to the European situation, it is necessary to add, for Europe, a nationality-based diversity focus. Taking into account the persistence and strength of nationality-related stereotyping and stereotypes, many of which are connected to the perception, treatment, and judgement of nationals from immediately adjacent countries, the necessity of establishing a nationality-related diversity focus is obvious. Having added a national perspective to the race- and culture-related ones already in place, our research contributes towards progressing in this direction. Just as most European companies, especially the larger ones, have changed their focus from national markets to, at least, the European market, so the same is true of the labour-markets from which such companies now recruit. Nationalist organizational diversity climates, therefore, can be seen as a threat to their competitiveness, because – as our study shows – they carry with them the danger of losing qualified employees, and of being less attractive for potential, qualified applicants. Therefore, by focusing on employees’ nationality, our study also makes an important contribution to research on employee recruiting and retention. Our development of a new measurement for a nationality-based organizational diversity climate, based on a specific sample of German employees in Switzerland and Austria, could prove a critical point. Since this measure might be contextual, we would, therefore, suggest validating this scale with further samples. However, given that Germans, on average, do not identify with their nationality as strongly as do many other nationals (Johnson 2017; Spohn 2015), one might expect that nationality-related issues in the workplace, especially social exclusion, in terms of their nation or nationality might have less of an impact for them. Our model, however, clearly shows an impact, and it will be interesting to see whether, in other national settings, this impact might be even higher. Furthermore, the linguistic, cultural and geographic vicinity of Germany, Austria, and Switzerland, makes the German case ideal for focusing on the nationality element, and disentangling this from cultural and racial climate facets. Although all of these heritage- and origin-related climates can co-occur at the same time, an isolated consideration of the nationality-related climate is only possible in such a special case. Against this background, our contribution to the discourse on diversity climates is twofold. Firstly, by introducing a national climate perspective, we broaden the predominant racial and cultural focus in origin-based diversity climate

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research. Secondly, by conceptualizing the NOCI as a two-dimensional construct, our research opens up a new perspective for a more nuanced understanding of diversity climates, which until now have mostly been understood as unidimensional constructs (Dwertmann et al. 2016). It is important to state that the development of the nationality-based organizational climate inventory was not driven by the basic assumption that non-host country nationals are always negatively discriminated against in the workplace. It was rather the absence of an adequate measuring tool to monitor the specific degree to which one’s nationality might be responsible for the organizational diversity climate, perceived by a foreign individual in the workplace, that motivated us. Of course, one’s foreign nationality can also be a source of positive discrimination, and of experiencing advantaging in the workplace. Reasons for this can be the specific political and historical relationship of one’s home and host countries, a set of positive stereotypes held by the host-country nationals in terms of the migrant’s nationality, or a more general positive curiosity and openness towards one’s nationality. For example, it might be that foreign nationals of small countries are approached differently by their colleagues than nationals from larger countries, as the probability of being amongst the first persons of this nationality to be encountered is much higher. Another reason for experiencing a positive organizational climate because of one’s nationality can also be the expected nationality-related benefits host-country nationals might expect from interaction, e.g. in establishing a network into this specific country, or improving language skills in the foreigner’s mother-language. However, future research applying the NOCI can help in shedding more light on these interrelations, and on the differences in specific national home-host-country constellations.

5.1.Limitations and Future Research The focus of our study was on the expatriates’ foreign nationality and related climate perceptions. We did not ask the reasons that brought them to the country, and we therefore did not distinguish between assigned and self-initiated expatriates. While, as already outlined above, these reasons might not change the shape of potential experiences they might have, because of their foreign nationality, these reasons could, indeed, be interrelated to differing intensities of these experiences (Crowley-Henry et al. 2016), and differing consequences. In terms of an expatriate’s propensity to turnover, Meuer et al. (2019) show that, for assigned expatriates, their off-the-job embeddedness better explains repatriation intention; for self-initiated expatriates, it is their on-the-job embeddedness. Thus, it might be that, in terms of the nationality-based organizational climate, the dimension of ‘social exclusion’ has a higher impact for assigned expatriates, in terms of their intention to leave, than does ‘job-and career related exclusion’, and vice versa for self-initiated expatriates. Furthermore, it might be that reasons for coming to the country that are unrelated to job and career-issues are unequally distributed amongst self-initiated and assigned expatriates. These, such as family- and love-related reasons, may also have an impact on an expatriate’s intention to leave, in one direction or the other. Our study does not give any information on this; it is, however, an interesting connecting or starting point for future research. Our analyses all rely on self-reported survey data. This method is appropriate for developing a subjective working climate. Self-reported data could, however, be biased, because of participants' social desirability, demand characteristics, and response sets (Mohd Mahudin et al. 2012); this is often cited as common method bias (Podsakoff et al. 2003). We applied Harman's one-factor test to analyze the prevalence of a common method bias. Although the test does not indicate the presence of a common method bias, we suggest further methods be incorporated to overcome this potential issue. For example, future studies should incorporate independent or objective measures, such as family members or colleagues. Furthermore, we allowed some correlation within organizational commitment, as well as within intention to leave, and also between exogenous

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variables, which were not postulated by theoretical assumptions, but proposed by statistical reasoning. That is, there is a possibility that our results may capitalize on chance; therefore, our findings should be replicated for another sample. A further limitation to which we should like to draw attention is the cross-level aspect of this study. We surveyed individuals to ascertain a proxy for an organizational climate. Hence, a further development of the design might be a multi-level study to survey several individuals within one organization. It might also be that by using an online-questionnaire we have excluded participants that are less acquainted with the internet. However, given that our focus was on employees who are still working and not already retired this should be less of an issue. From a diversity perspective it might be the commonly assumed vicinity of the concept of adjustment to the concepts of acculturation and adaptation (Harrison et al. 2004) which could provide one reason for the reluctance to draw on theories from adjustment research. These concepts might be perceived as being too close to the concept of assimilation, which is often framed as being some kind of antithesis to inclusion within the diversity discourse (Köllen 2019). However, referring to the concept of organizational climates for foreign employees can be a connecting point, or gateway, to help make both research streams more accessible to each other, and to overcome both the lack of diversity-informed research on the expatriation process (Al Ariss and Crowley‐Henry 2013), and the lack of expatriate adjustment-informed diversity research. Therefore, besides contributing to an underdeveloped, but important, stream of both adjustment and diversity management research, our study might pave the way for establishing a more lively and extensive dialogue between both research fields.

5.2.Managerial Implications

In practical terms, our research informs management about the relevance of an inclusive diversity climate, in terms of employees’ nationalities, for employee retention. It is obvious that managements should be sensitive to developing nationalist tendencies within the workforce, and nationally exclusive behavior. Human resource management should attempt to assure employees that their career-, promotion-, and recruitment-policies and practices are unrelated to employees’ nationality. Our Nationality-based Organizational Climate Inventory (NOCI) scale is a useful diagnostic tool for monitoring nationality-related exclusive tendencies within organizations. Supervisors, or those responsible for human resources within organizations, could evaluate the organizational climate, in order to either gain insights into the intentions of expatriate employees leaving the organization, (therefore preventing knowledge drain), or to further develop the organization’s diversity management. The self-assessment data provided by this scale can additionally furnish a deeper understanding of employees’ emergence of organizational commitment. Furthermore, employees benefit from this scale by revealing the underlying motivation behind their increased perceived intention to leave the organization.

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